Macroeconomics Answers

What is the meaning of the term "M.P.C.?" What information does this concept try to convey to us? Why do some economists contend that the M.P.C. measure is "more important" than the A.P.C. measure?

1. What, exactly, is the Consumption Function? What information does this concept try to convey to us?

2. What is the meaning of the term "A.P.C.?" What information does this concept try to convey to us?

3. What is the meaning of the term "M.P.C.?" What information does this concept try to convey to us? Why do some economists contend that the M.P.C. measure is "more important" than the A.P.C. measure?

4. Why do richer people tend to save more money than middle income or lower income families? Please list and discuss two reasons.

5 If a family demonstrates an APC of .90 and an MPC of .50, what does this tell us? Does this family's spending and saving pattern do 'more good than harm' to the U.S. economy, in your opinion? Or does it do more harm than good? Why?

You are given the following information about a closed economy with no government:
Consumption = 115 + 0.6Y
Investment = 550
Use the above information to answer the questions that follow:
Q.4.1 Calculate the value of autonomous spending.
Q.4.2 Calculate the value of the multiplier.
Q.4.3 Calculate the equilibrium level of income.
Q.4.4 Is the equilibrium level of income also the full employment level of income? Explain (3)
your answer.
Q.4.5 Identify any three non‐income determinants of consumption

Calculate the value of net national product (NNI) at market prices.

GDP at market prices
Net primary income payments to the rest of the world
Indirect taxes
Subsidies
R397bn R37bn
R23bn R11bn
© The Independent Institute of Education (Pty) Ltd 2020
Page 6 of 7

20 2020
Consumption of fixed capital R32bn
Q.3.1 Calculate the value of gross national income (GNI) at market prices. (3)
Q.3.2 Calculate the value of net national product (NNI) at market prices.

Over a period 2015 – 2019, South Africa experienced an increase in outflow of capital and a decline in capital inflows. The likely impact would be_______
[1] a weaker rand against major foreign currencies and an increase in the demand for net exports.
[2] a decrease in the demand of net exports and a leftward shift of the AD curve.
[3] an increase in interest rates and depreciation of the rand against major foreign currencies.
[4] a stronger rand against major foreign currencies and an increase in the demand for net exports.

a leftward shift of the investment curve may be caused by?

An increase in criminal activity in South Africa act as a deterrent to foreign tourists considering visiting South Africa, and as a result there a decline in the number of American tourists to South Africa

Explain with the aid of a graph ,the effect of this on rand/dollar exchange rate and the equilibrium quantity for dollars

1.5 and Q.1.6 are based on the following information about an economy that
produces the following combinations of two goods: bats and balls.
2018 (Base year) 2019
Quantity Price (R) Quantity Price (R)
Bats 205 8 210 9
Balls 310 4 320 5
Q.1.5 The value of the nominal GDP in 2019 is: (2)
(1) R1 530.
(2) R1 045.
(3) R2 880.
(4) R3 490.
Q.1.6 The value of the real GDP in 2019 is: (2)
(1) R1 880.
(2) R2 620.
(3) R2 960.
(4) R3 395.

Q.1.7 If the marginal propensity to consume

.1 Considering five macroeconomics objectives. Develop the recovery plan for the South Africa economy. What is that the government can do to boost the economy in relation to employment, inflation, economics growth, balance of payment and income distribution